Crisis typically sparks change. And after facing a series of climate, health, and societal challenges during the past year, a stark realization has become clear.
Our world has changed, and we’re not going back.
In a recent webinar hosted by Salesforce.org Philanthropy Cloud titled “Set Your CSR and HR Goals for 2021— Define Your Impact Metrics,” Brian Komar, vice president of Global Impact Engagement at Salesforce, and Tim Mohin, a globally-recognized thought leader in environmental, social, and governance disclosure, discussed the transformation taking place in corporate social responsibility (CSR) and the trends shaping the shift toward a new model that focuses on business as a platform for change.
This new model emphasizes workplace giving and volunteering, corporate philanthropy, employee engagement, and citizen philanthropists. “There is a fundamental shift in the role of CSR taking place,” Komar said. “It’s a mindset. And it’s about CSR and HR professionals seeing themselves in the driver’s seat as change agents to lead the transformation to stakeholder impact at their organization.”
Chief among the factors driving the transformation is the increase in corporate environmental, social, and governance (ESG) reporting, advanced by the harmonization of ESG standards. This urge to rapidly change ESG reporting and CSR through HR initiatives is being spurred by an effort to address a pressing global question: What’s our future societal impact going to be?
The new CSR model emphasizes workplace giving and volunteering, corporate philanthropy, employee engagement, and citizen philanthropists.
Cloud 3.0: The Way the Future Works
The events of 2020, particularly the global pandemic, thrust the world into change, which forced companies to quickly adopt new business models, collaboration methods, and connections with customers while developing a way for employees to work from home anywhere.
According to a Salesforce Future of Work study conducted between May and August 2020, roughly 69% of participants said they believed the pandemic would forever change the way we work. A year later, these new business models and approaches to work, collaboration, and connecting look like they’re here to stay.
Komar likened this transformation to Cloud upgrades, quickly moving from the more basic versions 1.0 and 2.0 to the advanced 3.0, where communication through Slack and Zoom, and Internet of Things (IoT) dominate.
“Cloud 3.0 is where the future works,” Komar noted, adding that operating in this new model “is really what will allow companies to grow and thrive in this work-from-anywhere world.”
At the heart of this shift is corporate responsibility and the ability to lead on societal issues by viewing business as a platform for change.
During the past year, the health crisis sparked by the pandemic, rapid climate change issues, inequality issues, and several instances of racial justice and intolerance were catalysts for a rapid change in ESG, CSR, and HR efforts for businesses.
“We’re entering a new era of accountability,” Komar said, “and that new era of accountability is really across every single sector,” grounded in what’s known as the ‘stakeholder impact imperative,’ which proactively and structurally drives the mutual understanding of interests and expectations between organizations and key stakeholders.
Meeting Stakeholder Expectations
Komar explained that stakeholder expectations have shifted, particularly during the past year. These are the stakeholders for any business:
- Consumers — Roughly 92% say they have a more positive image of a company when it supports a social or environmental issue.
- Employees — About 81% believing that good corporate citizenship is important when it comes to the company where they work.
- Investors — Approximately $53 trillion is projected to be invested on environmental, social, and corporate governance by 2025 .
- Corporate executives — A recent study by Deloitte notes that 11,000 C-suite professionals said social impact is the top factor used to measure success when evaluating annual performance.
“Companies that are leading with their values — that are purpose-driven — are delivering better results,” Komar said. The effects can be seen in a metric involving employee engagement, which typically tends to be low.
“The numbers,” Mohin said, “are showing an uptick since the pandemic, which is really interesting and a little bit surprising. People are starting to feel better about their jobs without going into the office.”
A Surge in ESG Reporting
According to a 2020 study by the Governance and Accountability Institute, 90% of S&P 500 companies now include ESG reporting compared with 20% in 2011 — that’s a 350% increase in nine years.
“Think about how just a remarkable change this is in a relatively short period of time,” Komar said, regarding that increase.
Mohin, who authored the book Changing Business from the Inside Out, explained why ESG reporting has become so popular: Investors, regulators, and other interested stakeholders are seeking this information.
“It started with just activists, and now it’s gone mainstream,” Mohin said, adding that now, “you’re seeing new players come into the mix.”
Learn More About the Transformation in Stakeholder Impact
Any company looking to revise its ESG reporting and CSR and HR initiatives needs to determine its core competency and what that core competency really allows the company to focus on. At Salesforce, Komar said, it’s involved “doubling down on” its “culture of service.”
Mohin offered companies the following advice: “Pick one [issue], really focus in on that, go through a couple of cycles of reporting and key results, and then expand from there.”
For more insights, watch the full webinar recording on demand.
About the Author
Director of Product Marketing for Philanthropy Cloud at Salesforce.org